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Almunia sticking to his guns in Google antitrust case

Despite heavy pressure, EU competition commissioner Joaquín Almunia is showing no sign of bending in the case against the US search giant, internal documents show.

In an explanatory note sent to MEPs, Almunia's services clarify the rationale behind the Commission’s provisional decision, announced in February, suggesting the EU Executive was close to a settlement with Google in their tug-of-war over online search.

Back then, the Spanish commissioner said the company’s latest commitments "address the Commission's concerns" as they involved displaying competitors in shopping search results, alongside Google’s own.

That was the first time that Almunia signalled his intention to put an end to the dispute, after having rejected two previous offers made by the American tech giant.

"Google has made far-reaching concessions as to the presentation of rivals on its page," reads the note, seen by EurActiv, which at the same time acknowledges that the remedies proposed by Google "do not guarantee equal treatment" with its competitors.

However, such equal treatment is considered "not indispensable to remedy the competition concern" and therefore "it would not be justified under EU antitrust rules," the document continues.

This note has been circulated among MEPs before the Commission will send "pre-rejection letters" to the companies which filed a complaint against Google's alleged dominant position.

The letters are aimed at silencing criticism against a decision seen by many observers as unfair. Among the 18 complainants are Microsoft and the online travel agency Expedia.

In the letters, the Commission will explain that the new Google offer addresses the key competition concerns, and will also clarify that "other issues raised by complainants are unfounded," reads the document given to MEPs.

The letters will be sent over the coming days or weeks in order to allow the complainants to respond, before the final decision which is expected by September.

Competition experts say the letters may be used for possible legal actions against the Commission decision by some of the complainants. In that case, the European Court of Justice will be asked to decide on the legitimacy of Almunia's choice.

A wall of concerns

Almunia's task is complicated by the unusual level of criticism against his plan to settle with Google’s latest offer.

When Almunia explained his decision internally, he received a backlash of cautious or critical comments from other Commissioners, according to the minutes of the Commission’s weekly meeting.

Commissioners asked whether there was room for manoeuvre "to secure from Google a further improvement in the commitments proposed," according to the minutes.

Some of them, including Internal Market commissioner Michel Barnier, and Energy commissioner Günther Oettinger, voiced their concerns on the record. A total of nine commissioners are seen as sceptical about the provisional deal announced by Almunia.

Consumers group have also harshly attacked Almunia for his initial settlement. “The Commission has emerged from a legal maze and brought consumers into a room of smoke and mirrors,” stated Monique Goyens, the director general of BEUC, an umbrella organisation representing consumer groups in Europe.

“After 3 years, the stated destination of countering abuse of a dominant market position has not been reached,” Goyens adds, arguing that consumers “should be able to expect neutral search results”.

“This is not a reality today due the nature of Google’s business model and we expected the Commission to remedy this," adds the statement published after the announcement last February.

Meanwhile, competitors are running a campaign arguing that Google’s latest offer is even worse than previous commitments, because it will allow the US search giant to make further benefits from competitors.

According to the latest offer made by Google, online travel agencies or hotel booking services will have three more visible slots in Google search results. But they will still be forced to bid for them, rather than appearing as a result of a neutral categorisation.

This auction may make the cost of their appearance higher than if this remedy was not in place, explained Thomas Vinje, a lawyer for FairSearch, a lobbying coalition gathering complainants in the Google case, including Microsoft.

Background

Despite cross-border limitations, e-commerce is slowly picking up in Europe and is expected to reach a total volume of over €260 billion by 2015, from €159 billion in 2011.

An increasing share of this activity passes now through online search, which is for many users the main gateway to the Internet and therefore to e-commerce.

Inevitably, this situation poses questions on the dominant role played by Google, which is by far the most important search engine in Europe and in the world. According to some estimates, Google controls 94% of online search in Europe.

The expansion of Google from online search to related areas such as bookings for hotel, travel or restaurants, has raised concerns in Brussels and pushed the European Commission to start an antitrust investigation in November 2010 over a possible abuse of Google’s dominant position.